Channel activities may be carried out by the marketer or the marketer may seek specialist organizations to assist with certain functions. We can classify specialist organizations into two broad categories: resellers and specialty service firms.
These organizations, also known within some industries as intermediaries, distributors or dealers, generally purchase or take ownership of products from the marketing company with the intention of selling to others. If a marketer utilizes multiple resellers within its distribution channel strategy the collection of resellers is termed a Reseller Network. These organizations can be classified into several sub-categories including:
- Retailers – Organizations that sell products directly to final consumers.
- Wholesalers – Organizations that purchase products from suppliers, such as manufacturers or other wholesalers, and in turn sell these to other resellers, such as retailers or other wholesalers.
- Industrial Distributors – Firms that work mainly in the business-to-business market selling products obtained from industrial suppliers.
Specialty Service Firms
These are organizations that provide additional services to help with the exchange of products but generally do not purchase the product (i.e., do not take ownership of the product):
- Agents and Brokers – Organizations that mainly work to bring suppliers and buyers together in exchange for a fee.
- Distribution Service Firms – Offer services aiding in the movement of products such as assistance with transportation, storage, and order processing.
- Others – This category includes firms that provide additional services to aid in the distribution process such as insurance companies and firms offering transportation routing assistance.